Brax bought 80% of Fox Company several years ago when fair value was equal to book value. On January 1, 2017, Fox has $ 100,000 of 8% bonds that were issued at par value and with five years to maturity. Interest is paid annually on December 31. Both Brax and Fox would use the straight-line method to amortize any premiums or discounts incurred in issuing or purchasing bonds. On January 1, 2018, Brax purchased all of Fox's bonds for $ 96,000.

Required:

Prepare 2018 entries for Brax and Fox in your own accounting records.

Prepare the worksheet entries required for consolidation.